An uncertain age for the publishing industry

The ‘Digital Age’ is not approaching as easily, or as quickly, as predicted on the turn of the century. At least, in terms of the publishing industry it isn’t. The devices used, such as Kindles, are not as economically viable as originally thought and books are still a principal source of revenue for many publishers.

In the late 1990s and early 2000s, many consultancy firms agreed that we would be saying bye to the book in the very near future. The performance of electronic publishing and eBooks fell short of what many had expected in the early 2000s.

In year 2000, PricewaterhouseCoopers published a report that predicted “an explosion of consumer spending on electronic books, estimating that by 2004 consumer spending on eBooks would reach $5.4 billion.” The hype created in the late 1990s died down around 2002 when publisher’s eBooks began to flop.

eBooks vs publishing houses

Publishers have been affected in many, unpredicted ways by the introduction of eBooks. The current lawsuit against Apple and US publishing companies is a good example of just how much the digital age is affecting publishers. In a civil antitrust lawsuit this year, the US Justice Department alleged that CEOs of Apple and five of the US’s largest publishing companies met regularly to discuss how to respond to steep discounting of their eBooks by Amazon.com Inc. The five publishers and Apple created an agency model that lifted the price of many best-selling eBooks to around USD $13.00. The publishers and Apple had concluded that if they were forced to sell eBooks at Amazon’s price of USD $9.99, or less, they would not earn enough to make their eBook business profitable. John Makinson, chief executive of Penguin Group, defended the agency model as one that “offers consumers the prospect of an open and competitive market for eBooks.” The publishers have the most to lose in this lawsuit, as it would cost them millions to drop back down to Amazon’s eBook prices.

The reality is that most publishers would not be able to survive in their current
form if readers completely switched over to eBooks and stopped buying paper books. They just cannot compete in the current market. EBooks are becoming more popular, but they aren’t completely economically viable. The costs of research, cover artwork and paying authors do not change from print to digital forms. Although there are marginal saving on things like paper, printing and warehouses, ultimately eBooks are still expensive things to make. Many people
have unrealistic expectations of eBook prices. The current prices are not low enough to entice all readers to switch over to digital completely.